How successful will Amazon Prime Now be in Singapore?

Nurdianah Md Nur |
July 28, 2017

So what's the plan for Southeast Asian e-commerce players if they want to better compete with Prime Now? Forrester, Gartner and Qoo10 share their thoughts.

From left to right: Sebastian Bruchet, Country Leader of Prime Now; Henry Low, Director of Prime Now, Asia Pacific; S Iswaran, Minister for Trade and Industry; Aarif Nakhooda, Director of Prime Now, Asia Pacific; and Mariangela Marseglia, Director of Prime Now, International at the launch of Prime Now in Singapore. Credit: Amazon.

By now, you would have heard that Amazon's Prime Now has finally made it to Singapore's shores.

Prime Now offers a free two-hour delivery service on orders of at least S$40. Consumers can place their orders for grocery items, consumer electronics, and other goods from the Prime Now app, which is now available on Google's Play store and Apple's App store.

Amazon is able to deliver in a short period of time as it uses "advanced techniques and algorithms such as random stow, batching and machine learning to fulfill orders as quickly and efficiently as possible," shared Ivan Lim, site leader at Prime Now hub in Singapore at the launch of the service on 27 July 2017.

While the short delivery time will be a huge draw to consumers, the U.S. retailer will need to overcome a number of barriers to thrive in Singapore.

"How successful Amazon will be remains to be seen as there are huge challenges and strong competition in the market, especially that from Alibaba-owned Lazada. Having been in the market for a few years, Alibaba-Lazada has a stronger understanding of the demands and behaviours of local customers, as well as working with logistics and vendor systems. It has also been working on building an ecosystem since the acquisition of RedMart, and launched their Liveup loyalty programme that partners with other digital ecosystem players such as Uber and Netflix," said Xiaofeng Wang, senior analyst at Forrester.

"However, Amazon has its strengths as well. Their competitive advantage lies in the strength of U.S. products/brands and (electronic) books, etc. How it localises Amazon Prime and leverages its tech strengths, such as personalisation and intelligent agents to provide a better customer experience to meet the needs of customers here, will be the key to success," she added.

Agreeing with Wang, Adrian Lee, research director at Gartner, said: "The two-hour delivery window is going to be a critical weapon for Amazon Prime Now. They now have a 'cold start' problem, as a quick inspection of their Singapore Prime offering reveals a much smaller merchandise selection than what's available on its parent site. They need to ramp that up quickly to match accessibility on their U.S. or UK sites. With competitors like Lazada and Qoo10, Amazon still has work to do before they can be considered as doing well in Southeast Asia."